The Neighborhood Stabilization Program (NSP), which built on Community Development Block Grant concepts, was part of a package of U.S. Dept. of Housing and Urban Development (HUD) programs adopted to deal with the consequences of the housing market collapse. NSP had three rounds of funding, all directed toward assisting communities as they addressed the neighborhood effects of the wave of foreclosures that followed the end of the housing boom. The principal concern was that the foreclosures had a contagion effect, depressing the value and maintenance of surrounding properties and intensifying the crisis at the neighborhood level. This analysis focused on the second round (NSP2). It found that NSP2 was too modestly funded to consistently arrest the declines in property values or achieve the impacts that were hoped for. Figures. This is a print on demand report.

The past decade has been marked by a massive housing bubble and foreclosure crisis. During the first half of the decade, home prices nationally experienced unprecedented growth, increasing 85 percent in real terms between 1997 and 2005 (Shiller, 2008). The increase was notable for its sheer magnitude and because it occurred in many markets throughout the country. In a report to Congress on the causes of the foreclosure crisis, the U.S. Department of Housing and Urban Development (HUD) detailed how, in a few short years, the country saw a housing market that had seemingly limitless potential for growth change into one that brought the economy to the brink of collapse (HUD, 2010).